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Burberry Announces Turnaround Plan as Sales Continue to Slide

FILED - 22 August 2018, England, London: A general view of the Burberry logo displayed on the facade of its store in New Bond Street. Photo: Yui Mok/PA Wire/dpa
FILED - 22 August 2018, England, London: A general view of the Burberry logo displayed on the facade of its store in New Bond Street. Photo: Yui Mok/PA Wire/dpa
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Burberry Announces Turnaround Plan as Sales Continue to Slide

FILED - 22 August 2018, England, London: A general view of the Burberry logo displayed on the facade of its store in New Bond Street. Photo: Yui Mok/PA Wire/dpa
FILED - 22 August 2018, England, London: A general view of the Burberry logo displayed on the facade of its store in New Bond Street. Photo: Yui Mok/PA Wire/dpa

Burberry's new CEO Joshua Schulman announced a turnaround strategy for the struggling British luxury brand on Thursday, as sales continued to slide in its second quarter.
Burberry suspended its dividend for 2025 and announced a 40 million pound ($50.73 million) cost savings program. According to Reuters, Schulman said the brand needed to focus back on outerwear and its core customer.
"Today, we are acting with urgency to course correct, stabilize the business and position Burberry for a return to sustainable, profitable growth," Schulman said in a statement.
Sales in Burberry's second quarter ending Sept. 28 fell at the same pace as the first, with revenue for the first half down 20% in constant currency.

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Fashion

Hugo Boss Third Quarter Operating Profit Beats Expectations on Better Cost Control

New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)
New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)
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Hugo Boss Third Quarter Operating Profit Beats Expectations on Better Cost Control

New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)
New Hugo Boss logo and their website shop are seen in this illustration taken, May 17, 2024. (Reuters)

Hugo Boss' third-quarter operating profit slightly beat market expectations on Tuesday, as the company reported a 1% increase in currency-adjusted group sales amid persistently weak demand in China.

Quarterly earnings before interest and tax (EBIT) were down 7% on the year at 95 million euros ($103.3 million), but above analysts' estimate of 90 million euros in a company-provided poll, helped by cost management, it said.

Hugo Boss shares were indicated 2.5% higher in Lang & Schwarz premarket trade.

"Estimates for the coming quarter should be anchored today," analysts at Jefferies wrote in a note to clients, highlighting improved sales in September, better cost control and Hugo Boss' confirmed guidance for the year.

After a 2022 brand revamp boosted its resilience last year, the upmarket fashion label has been grappling with weakening consumer demand despite increasing investment in marketing and production capacity in recent months.

Currency-adjusted sales were 1.029 billion euros during the three months, slightly up from 1.027 billion last year and broadly in line with market expectations of 1.023 billion euros.

"Particularly in China, the overall market environment was affected by persistent subdued consumer demand," the company said in a statement.

Quarterly currency-adjusted sales in its third-biggest market Asia/Pacific fell 7% to 110 million euros, but increased 1% in the Europe, Middle-East and Africa region and 4% in the Americas.

The company said improvements in Germany offset softer sales trends in France and in Britain, while it also saw further sales improvements in the United States.

Hugo Boss, which is taking additional measures to enhance efficiency and effectiveness, especially around sourcing, said it continued to focus on cost control to support profitability into the fourth quarter. It maintained its full-year sales and earnings forecasts after slashing them earlier this year.